ATLANTIC CITY, N.J. — Do not expect an easy fix for the US economy–that is the bottom-line message in the economic outlook speech delivered by Mike Schenk, vice president of economics at CUNA, at the “Credit Union Reality Check” conference in Atlantic City, hosted by the New Jersey Credit Union League.
Talking to a room filled with credit union executives, Schenk stressed that the data is ample: the credit union model works, even in the troubled economy of the past few years. Schenk's numbers showed that credit unions–by offering better-priced loans and services–saved their members some $6.6 billion in 2010, compared to banks. “Credit unions have delivered real value to their members.”
Even though the economy is improving significantly, said Schenk, credit unions need to accept persistent sluggishness in lending (“consumers are up to their eyeballs in debt,” he explained). The housing market, too, is in for a lengthy recovery, according to Schenk.
But he nonetheless expressed considerable optimism. “We have seen that credit unions can endure lower earnings for short periods but still serve their members,” he said.
Schenk also presented data showing forecasted corporate credit union losses totaling $10 billion to $16 billion from mortgage backed securities. About $7 billion has been paid, leaving $3 billion to $9 billion to be paid by credit unions–meaning the corporate credit union problems continue to impact the system.